The PTO may be the most effective forum to determine validity: The forum may make all the difference between a successful and an unsuccessful challenge to the validity of a patent. Forum selection—PTO versus court—will depend on the complexity of the technology and the type of invalidity challenges available. Because of the factors discussed below, an AIA contested proceeding often will be a more effective forum for complicated technology or validity challenges primarily based on obviousness.

First, the burden for establishing unpatentability of a claim is lower in a contested proceeding than in the district court, where patent claims enjoy the presumption of validity. A defendant can only overcome that presumption with clear and convincing evidence of invalidity, whereas in AIA contested proceedings, the PTO applies the lower preponderance of evidence test. Second, in AIA contested proceedings, claims are construed using the broadest reasonable interpretation. This standard often results in broader constructions than the district court will apply, and has the salutary effect of opening the patent to additional prior art challenges. Third, in AIA contested proceedings, a panel of administrative judges specifically trained in patent law (administrative patent judges, or APJs), having both technical and legal degrees, decide the issue in contrast to a nontechnical civil jury in district court. Those of us who try cases know the practical difficulty of persuading a civil jury that the asserted patent is invalid once plaintiffs counsel shows the official patent with its seals and the judge solemnly advises the jury about the presumption of validity.

A court is more likely to stay a litigation pending outcome of AIA contested case: We all know how expensive district court and International Trade Commission (ITC) litigation can be because those courts rarely restrain litigation discovery costs. The most expensive aspect of district court and ITC litigation involves discovery and trial costs. And those costs are particularly frustrating when the asserted patent has significant validity issues. Thus, obtaining a stay of the litigation early in the case to challenge patent validity at the PTO will help defer, and probably avoid, these costs. Historically, courts have been reluctant to stay a litigation pending the outcome of a reexamination proceeding at the PTO, resulting in a number of cases in which the reexamination and litigation proceeded on parallel paths.

With the passage of the AIA, Congress intended that contested proceedings at the PTO be a true alternative to district court or ITC litigation, and thus a tool to allow parties to avoid unnecessary costs. To address the criticism that reexamination proceedings were open-ended, Congress set statutory limits on AIA contested proceedings, requiring the matter to be completed within one year instituting the proceeding, except for a six-month extension for good cause. Second, the standards for instituting AIA contested proceedings are higher than in reexaminations. The petitioner in an inter partes review must demonstrate a reasonable likelihood of prevailing on at least one claim, and in a post grant reviewor covered business method review, petitioners must demonstrate that it is more likely than not that at least one claim is unpatentable. Therefore, a contested case, once instituted by the PTO, provides a strong indication to the court of the strength of the defendant’s invalidity defense and thus constitutes another reason to grant a stay.

To maximize cost savings, a defendant should file a contested case as early as possible in the litigation. Our research of the filed contested cases having co-pending litigations shows that courts are willing to grant stays even prior to the decision by the PTO to institute the contested case.

AIA contested proceeding may result in a faster, more efficient resolution to the dispute: As discussed above, the AIA requires contested cases to be completed within 12 to 18 months after institution (18 to 24 months after filing). In most jurisdictions, litigation takes two to three times longer. If the petitioner is successful in proving invalidity, the dispute between the parties is effectively ended with the conclusion of the AIA proceeding. Therefore, contested proceedings can offer a more efficient time frame for resolving disputes and removing the disruptions to the corporation caused by the cloud of litigation. Additionally, parties now have the ability to settle a filed AIA contested case. The ability to settle a contested proceeding provides a defendant with an additional tool to bring the dispute to a rapid resolution.